Cathay Pacific Group announced a corporate restructuring in response to the continued impact of the coronavirus pandemic on the aviation market which included ceasing the Cathay Dragon operations and reducing its workforce.
The Hong Kong-based airline said the restructuring will enable the Group "to secure its future," so it can protect as many jobs as possible, whilst meeting its responsibilities to the Hong Kong aviation hub and its customers.
The Group will also create a more focused, efficient and competitive business while leveraging the potential of its low-cost carrier, HK Express.
Some of the major elements of the restructuring include reducing its workforce by 24% (8,500 positions); ceasing the operations of Cathay Dragon effective immediately; and seeking regulatory approval for a majority of Cathay Dragon's routes to be operated by Cathay Pacific and HK Express.
No immediate impact on cargo
In a separate statement, Cathay Pacific Cargo assured shippers that the shutdown of Cathay Dragon — which is Cathay Pacific's international regional airline — will have a limited impact on the carrier's current cargo network.
Cathay Pacific Cargo said the global pandemic continues to have a devastating impact on aviation and on the Cathay Pacific business, and while its cargo freighter operations have continued to operate at full capacity throughout this time, the passenger business shows few signs of recovery in the near term.
As a reference point, the carrier said in September Cathay Pacific carried just 1,500 passengers a day compared to the 100,000 that it would normally expect to carry.
"We have taken every possible action to mitigate the losses associated with the current pandemic and our recent recapitalisation has enabled us to continue to operate ... so far we have been able to weather the storm. Unfortunately, we will not survive without further measures. As a result, we have today announced a restructure of the Cathay Pacific Group," the statement read.
Cathay Pacific Cargo said this means focusing on two clearly segmented passenger brands: Cathay Pacific’s premium experience and strong brand recognition, complemented with the low-cost model of HK Express, sadly it noted that the Group has decided to cease Cathay Dragon operations and retire the Cathay Dragon brand.
"From a cargo perspective, the Cathay Pacific Cargo brand will continue to operate as scheduled and our freighter operations remain fully intact. However, with the closure of our Cathay Dragon brand, cargo-only passenger services to exclusive Cathay Dragon ports will cease with immediate effect," it said.
"This will have a limited impact on our current cargo network coverage in the short term."
Affected ports of operation
Cathay Pacific Cargo said ports affected where the Group is currently operating Cathay Dragon regular cargo services are Fuzhou Changle International Airport (Fujian), Guangzhou Baiyun International Airport (Guangzhou), Kuala Lumpur International Airport (Malaysia), and Fukuoka Airport (Japan).
Other Cathay Dragon ports where the airline operates on an adhoc basis will also be affected, it added.
Meanwhile, it added that Cathay Pacific Cargo will continue to operate freighters to Xiamen and Chengdu, and to Hanoi Noi Bai in Vietnam, although there will be no passenger aircraft to these ports in the near term.
"We recognize that this will have an impact on our network and therefore may affect your business," it added, noting that the Group is working to protect affected cargo where possible and restore services to affected ports.
